The new cabinet of 22 people meets campaign pledges of being smaller than its predecessors and having gender parity, with European lawmaker Sylvie Goulard landing the prestigious defence portfolio.
She will take over from veteran Socialist Jean-Yves Le Drian who will move over to foreign affairs, while rightwinger Bruno Le Maire was appointed economy minister.
Other key figures instrumental in Macron's sensational victory in this month's election were given senior roles, with the Socialist mayor of Lyon, Gerard Collomb, named as interior minister while centrist ally Francois Bayrou becomes justice minister.
France's youngest ever president wants to create a new centrist force in French politics - at the expense of the traditional Socialist and Republicans parties - which will be put to the test in parliamentary elections next month.
Without a parliamentary majority, he will find it hard to push through his ambitious plans to loosen France's strict labour laws, boost entrepreneurship and reduce class sizes in tough neighbourhoods.
Along with politicians, the government will feature new faces from civil society, including black Olympic fencing champion Laura Flessel, renowned environmentalist Nicolas Hulot and publisher Francoise Nyssen.
Macron has promised a new law introducing higher ethical standards for lawmakers as one of his first pieces of legislation and was keen to avoid possible embarrassments, aides said.
Former president Francois Hollande was left red-faced by revelations in 2012 that his budget minister Jerome Cahuzac, a plastic surgeon, had a bank account in Switzerland where he had hidden income from tax authorities.
In his busy first week, Macron is also set to meet EU Council President Donald Tusk in Paris today as he tackles his top foreign priority of reforming the European Union.
Tusk was one of the first prominent European voices to congratulate Macron on his May 7 presidential election runoff victory over far-right and anti-EU politician Marine Le Pen.
Macron, who ran a staunchly pro-European campaign, kept with tradition by visiting German Chancellor Angela Merkel on Monday in his first trip abroad after taking office.
The pair now at the centre of the European project vowed to give it new impetus, saying they were ready to change treaties if necessary.
Macron has urged a deepening of the EU to fight off a recent surge of populism on the continent.
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